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In 2025, after more than two decades of dormancy, Nigeria began the process of disbursing the Cabotage Vessel Financing Fund. For anyone in Nigerian shipping, this is the question worth answering properly: what is the CVFF, in practical terms, and who can actually access it?
The short answer is that it is a loan, not a grant, funded partly by a levy charged on the Nigerian cabotage trade since 2003 which is being accessed after two decades.
Where the money came from?
The CVFF was established under the Coastal and Inland Shipping (Cabotage) Act 2003, funded by a 2 percent levy on cabotage-protected trade earnings, that is, revenue from shipping activity reserved for Nigerian operators under the Act. The intention was always to recycle that levy into vessel acquisition finance for Nigerian shipowners. For roughly two decades, the fund simply accumulated, reportedly reaching several hundred million dollars, without a functioning mechanism to disburse it. Disputes over who owned the fund and who should benefit from it, combined with the absence of an operational lending framework, kept it dormant while Nigeria’s coastal and inland shipping continued to rely heavily on foreign-flagged tonnage. These issues were aggravated by bureaucratic red tape and political interference preventing the disbursement of the fund.
That changed in January 2026, when the Minister of Marine and Blue Economy launched the CVFF application portal, formally opening the fund for disbursement under NIMASA’s administration.
Who is lending the money?
NIMASA does not hand out the funds directly. It administers the fund and runs a dedicated Cabotage Secretariat Unit to manage applications, but disbursement runs through a panel of appointed Primary Lending Institutions, commercial banks responsible for assessing applicants, disbursing approved facilities, and managing the loan relationship thereafter. The panel has grown from an initial five banks appointed in 2023 to twelve today, including Fidelity Bank, Stanbic IBTC, Jaiz Bank, Optimus Bank, First Bank, SunTrust Bank, Union Bank, Zenith Bank, Lotus Bank, United Bank for Africa (UBA), and the Bank of Industry (BOI), among others named in NIMASA’s marine notices.
The banks signed a Memorandum of Understanding with NIMASA pursuant to the CVFF Guidelines 2006. The MOU places all the risk on the banks; hence, the PLIs must be very diligent in their risk assessment, due diligence, credit risk assessment, and all preliminary undertakings in the CVFF process.
This matters practically: an applicant does not apply to NIMASA for money. They apply through the CVFF portal, which routes the application to a Primary Lending Institution for credit and risk assessment before getting to NIMASA for scrutiny and finally to the Minister for approval.
By virtue of the approved structure, eligible applicants are entitled to up to $25 million each, covering 70% of the loan amount. The beneficiaries must cover at least 15% equity, while the remaining 15% will be financed by participating banks. The loans will have a tenure of eight years and attract an interest rate of 6.5%.
No loan application shall be processed unless and until the applicant’s application has been successfully scrutinized by the PLIs and NIMASA and approved by the Minister in line with CVFF guidelines.
Fund Determinants
In order to achieve the fund’s objective of risk reduction, the secretariat has developed guidelines that have established a set of categories for loans or obligations guaranteed or to be guaranteed under the fund, which can be annually updated.
The terms, at a glance, include
| TERM | POSITION | |||
| 1 | Nature of the facility | A loan at concessional, single-digit interest (6.5%), not a grant | ||
| 2 | Facility size | Up to USD 25 million per qualifying applicant | ||
| 3 | Minimum equity contribution | 15 percent of the credit facility requested, under the CVFF Guidelines | ||
| 4 | Who can apply | Nigerian citizens and shipping companies wholly owned by Nigerians | ||
| 5 | How to apply | Through the NIMASA digital application portal, routed to a Primary Lending Institution | ||
| 6 | Verification required | A bankable feasibility report, independently verified by the lending bank and by NIMASA | ||
| 7 | Fund structure | Revolving. Repayments are meant to be recycled into future disbursement rounds | ||
| The CVFF is not a subsidy to be drawn down once. It is a revolving fund, which means every applicant’s repayment discipline affects whether the next Nigerian shipowner in line gets financed at all. | ||||
Why the eligibility bar is worth taking seriously
Because the fund is revolving rather than a one-time appropriation, the way it is used now shapes what is available later. NIMASA and the Primary Lending Institutions are in effect jointly responsible for stewarding a pool of capital that has to keep working for the sector over time, not just this cycle of applicants. That is part of why the eligibility and verification requirements exist and why they are unlikely to loosen: a feasibility report that overstates a vessel’s earning potential or an applicant that does not genuinely satisfy the Nigerian-ownership requirement does not just put one bank’s loan at risk. It puts the next shipowner’s access to the fund at risk too.
For shipowners considering an application, that is the practical takeaway from this issue: come to your Primary Lending Institution with a genuinely bankable proposal, not the minimum paperwork required to clear the door. In our next issue, we look at why this matters so much: the CVFF is not Nigeria’s first attempt at vessel finance, and its predecessor failed in ways that shaped how this fund is meant to be recovered when a loan runs into trouble.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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